Govt deficit widens as tax take falls

The New Zealand government's operating deficit was wider than forecast in the first quarter of the financial year as the Crown took in less tax than expected in a subdued economy.

The operating balance before gains and losses (obegal) was a deficit of $2.1 billion in the three months ended Sept. 30, $449 million, or 27 per cent bigger than forecast. Core Crown tax revenue was $13.5 billion, or 2.1 per cent lower than expected, the Treasury said.

Core Crown spending was 1.1 per cent below forecast at $17.3 billion, with under-spending on welfare, education and finance costs. These were offset by higher-than-expected earthquake expenses.

The operating balance including gains and losses was a surplus of almost $100 million, or $1.2 billion better than expected, reflecting gains from the NZ Superannuation Fund and the Accident Compensation Corp's investment portfolios.

Gross debt amounted to $79.3 billion, or 38.8 per cent of gross domestic product. Net debt was $54.9 billion, or 26.9 per cent of GDP.